Friday, March 23, 2012

Gonna Take It: Yaz class certification denied

Plaintiff alleged that she chose Yaz over cheaper
contraceptives because of DTC ads containing material omissions about the
limits of Yaz’s promises. The court denied certification of a class of
California consumers who bought Yaz.

Yaz has been approved as a treatment for premenstrual
dysphoric disorder (“PMDD”) in women who choose to use an oral contraceptive,
but not for PMS or premenstrual symptoms not severe enough to constitute PMDD. PMDD and PMS share some common symptoms, but
PMDD involves more of them and a more severe effect on a woman’s activities
and/or relationships. PMDD affects 3-8%
of women, while PMS/premenstrual symptoms affect many more women (from 20-90%)
and often don’t require or get treatment.
A wide range of treatments exist for

premenstrual symptoms, PMS, and/or PMDD.

Plaintiff challenged two TV ads, “Not Gonna Take It” and
“Balloons,” which allegedly (1) failed to disclose the fact that YAZ was
neither approved for nor shown effective in treating, curing, and/or mitigating
PMS or premenstrual symptoms, and (2) misled by referring to generic symptoms
such as “bloating” and “moodiness” that are associated with PMS and
premenstrual symptoms as well as PMDD.

“Not Gonna Take It,” had women singing “We're Not Gonna Take
It” while they kick, punch, and push words that describe symptoms such as “irritability,”
“moodiness,” “bloating,” and “feeling anxious” away from the screen. The announcer said, “YAZ is the ONLY birth
control proven to treat the emotional and physical premenstrual symptoms that
are severe enough to impact your life.”
“Balloons” featured balloons with the words “irritability,” “moodiness,”
“feeling anxious,” “bloating,” “fatigue,” “muscle aches,” and “headaches” while
“Goodbye to You” played in the background, with the same claim by the
announcer. (Storyboards
here.)

Another TV ad ran during the class period, showing three
women talking about Yaz in a nightclub.
This one expressly distinguished PMDD from PMS, and plaintiff didn’t
claim it was deceptive.

The FDA issued a warning letter over “Balloons” and “Not
Gonna Take It” for failing to distinguish clearly enough between PMDD and PMS
and misleadingly suggesting that Yaz was effective in a broader range of
patients than warranted by the evidence.
Bayer responded with a $20 million corrective advertising campaign.

Plaintiff brought claims under the CLRA, FAL, and UCL. She contended that, had class members not
been deceived, they would have bought an equally effective and cheaper oral
contraceptive. Bayer allegedly misled
consumers to get a greater share of the market, allowing it to sustain an
inflated price. The proposed California class
would cover consumers who were exposed to the two ads and bought Yaz. (The named plaintiff couldn’t have seen
“Balloons” before she bought her first prescription because it hadn’t aired
yet.)

Plaintiff relied heavily on Krueger v. Wyeth, Inc., No. 11–80814
(S.D. Cal. March 29, 2011), concering an allegedly false advertising campaign
for hormone replacement therapy, which was touted as reducing the risk of
cardiovascular disease, dementia, and Alzheimer’s and as not causing breast
cancer, but allegedly in fact increased all these risks. The district court certified a California
class. The court found it
distinguishable because the drugs there purportedly had the opposite effect of
their advertised benefits, so the misrepresentations/omissions at issue “would
clearly be material to putative class members.” By
contrast, the materiality of omissions or misrepresentations about Yaz’s
efficacy/approval status in treating certain symptoms may have varied from
person to person, “making a class-wide presumption as to materiality
inappropriate.” Moreover, Krueger involved widespread, uniform
material misrepresentations over an 8-year ad campaign. This was a “stark contrast” to the Yaz ads at
issue, which aired over 18 months and was followed by a corrective ad and
literature that putative class members might have seen. Moreover, valuation
wasn’t at issue in Krueger; the
plaintiff there didn’t contend that absent deception she would have purchased
another, less risky drug, because there was no similar drug on the market
during the class period. Thus, there was
no need to assess the drug’s value to each class member or the proper
alternative drug for each class member.

Turning to the case before it, the court (like many others)
rejected Bayer’s argument that putative class members must have sustained
actual injury to have Article III standing.
Under 7th Circuit authority, only the class representative’s
Article III and statutory standing is at issue.
And the class representative had standing, by virtue of her allegations
that she paid more than she otherwise would have because of the ad
campaign. However, in assessing whether
a class is overly broad for certification purposes, the court would consider
whether the putative class “includes members who could not possibly have been
injured by the defendant's conduct.”
Though California law doesn’t condition recovery on individual proof of
deceit, reliance, or injury, the court held, that doesn’t mean that such issues
will always be subject to common proof; when assessing predominance, it may be
relevant that class members couldn’t possibly have been injured.

Following Krueger,
plaintiff proposed establishing class membership through pharmacy records
showing purchases and then asking absent class members whether they’d seen one
of the ads before purchasing. The court
wasn’t convinced that this would be appropriate or administratively feasible,
because of the third ad that ran during the class period, and also because of
the role of the prescribing doctor and other Yaz literature available during
the class period. Moreover, class
membership “would depend on the subjective and often unreliable vagaries of
human memory.” The class representative
here, for example, initially claimed that she saw both ads, but then at her
deposition couldn’t recall specifically which ads she saw, and it turned out
that she couldn’t have seen “Balloons” before her first prescription; she also
remembered an ad “involving a group of women at a nightclub,” which was not
deceptive. “In light of the above, the
Court is not convinced that a questionnaire containing the single question
proposed by the plaintiff (or containing any group of questions) will afford
adequate procedural protection to defendant…. Defendant is entitled to test the
memory and credibility of each potential class member just as it did with Ms.
Burns. Accordingly, determining class membership can only be accomplished
through arduous individual inquiries pertaining to each unnamed class member.”

Though numerosity and commonality were satisfied (even though
the named plaintiff didn’t see “Balloons,” it allegedly contained the same
misrepresentations/omissions as “Not Gonna Take It”), typicality was a
problem. The CLRA and fraudulent
concealment claims required a showing of reliance, and “the record does not
warrant an inference of reliance as to the entire class.” Some class members “necessarily” would be
women who took Yaz knowing it wasn’t approved to treat PMS. The putative class also included women who
didn’t suffer from PMS or premenstrual symptoms, and as to whom the claims
wouldn’t have been material. Thus
typicality was lacking.

The court also expressed concern about the close friendship
between the class representative and counsel’s wife, which could create a
conflict of interest; thus, the class representative failed to provide adequate
representation.

Continuing on, the court also found that Rule 23(b)(3) wasn’t
satisfied. Though a representative
plaintiff isn’t required to show that unnamed class members were actually
deceived to maintain a UCL claim, a class action can be rejected where individual
proof would be necessary to show whether fraudulent representations were
actually made to each class member or where the class members weren’t exposed
to the same fraudulent representations. Moreover, “class treatment may be
inappropriate when class members were exposed to disparate information from
various sources, regardless of uniform representations that were made.” That was the situation here, and materiality
likewise was not subject to common proof.
Because Yaz was only available by prescription, uniformity analysis had
to consider representations made to (and by) prescribing doctors. Plaintiff argued that contraceptive
prescriptions are patient-driven, not subject to doctors’ decisionmaking. The court disagreed: doctors have to exercise
independent medical judgment before prescribing a contraceptive. Thus, statements made to them matter, and
also the statements they made mattered.
When a salesperson makes an individualized statement combined with an
identical misrepresentation conveyed by an institutional defendant, that can
defeat class certification, and the situation here was analogous.

Absent class members have to be entitled to restitution or
injunctive relief in order to be included in the class, and for similar
reasons, that couldn’t be determined here, even though the UCL and FAL don’t
require strict but-for causation or reliance.
There must be some connection between the defendant’s improper conduct
and the class members seeking restitution—plaintiffs who weren’t exposed to the
practice at issue can’t receive restitution.
(The court noted that “[a] different result might be warranted if a
particularly egregious and extensive misleading advertising campaign was in
issue.”)

Moreover, plaintiff didn’t show that the classwide restitution
would be measurable. Though calculating
restitution amounts is the kind of issue that generally doesn’t preclude
certification, the question was how the plaintiff would show entitlement to a
measurable amount. With overpayment
claims, the traditional method is to show a price difference between the
defendant’s product and a “viable comparator product.” The key here was whether there was a
difference between what the plaintiff paid and the value of what she
received. But the plaintiff didn’t
identify an appropriate generic oral contraceptive as a comparator, and the
record showed that there are numerous alternatives; in fact, the representative
plaintiff was prescribed several different oral contraceptives in an effort to
find one that worked well for her. “Without
a valid, class-wide comparator drug, establishing the existence of a measurable
amount of restitution will turn on a number of patient-specific factors.”

Similar issues doomed the CLRA/fraudulent concealment class claims,
which had the additional element of reliance.
Reliance may be inferred classwide when misrepresentations were uniform
and material, but that wasn’t the case since not all consumers would have been
seeking PMS treatment.

Relatedly, a class is overly broad if it includes “a great
many” people who couldn’t have been injured by the defendant’s conduct. “Here, the putative class indisputably
includes women who did not rely on and were not deceived by the alleged
omission. This includes women who (1) were told by their healthcare provider
that YAZ was not indicated to treat PMS or pre-menstrual symptoms and (2) who
were exposed to and understood YAZ literature or other advertisements stating
that YAZ was not indicated to treat PMS or pre-menstrual symptoms.” (The court didn’t count women whose treatment
was successful in determining overbreadth—there’s a difference between those
who weren’t harmed and those who couldn’t have been harmed; only the
latter count for this inquiry.)

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